The main goal of this paper is to propose and analyze several indices that measure the extent of
financial inclusion of Uruguayan households. It is particularly relevant since the information
used immediately predates the enactment of the Financial Inclusion Act and can thus be
employed as a baseline. We rely on three alternative data sources: the Survey of Uruguayan
Households’ Finance (EFHU-2), Uruguayan Central Bank information about the payment
system and the Households’ Continuous Survey (ECH). We compile synthetic indices that
consider three dimensions of financial inclusion: access, use and barriers and aggregates them.
To construct indices based on microdata originated in EFHU-2 and ECH we employ both a
deterministic approach as well as a parametric one based on Principal Components Analysis
(PCA). We conclude that financial inclusion in Uruguay is low on average, which means that
the Financial Inclusion Act could have substantial impact in domestic financial markets. The
main determinants of financial inclusion are income and education. In particular, the effects of
education on financial inclusion are important even after controlling for differences in income.
Partial indicators point to an increase in the degree of financial inclusion in Uruguay in the
period 2012-2014. Finally, supply-side indicators show that Uruguay’s financial infrastructure
presents a similar degree of development to that of Argentina and Chile, higher than Paraguay’s
but significantly below Brazil’s.